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Someone just told me they got their Twitch 1099s.
Time for general tax advice for all US based new media creators.
Yes, you need to file if you have at least $400 in NET self-employment earnings (non W-2). But, here's the trick - the IRS doesn't know your expenses (1/14)
Time for general tax advice for all US based new media creators.
Yes, you need to file if you have at least $400 in NET self-employment earnings (non W-2). But, here's the trick - the IRS doesn't know your expenses (1/14)
This is part of the system known as voluntary compliance. Paying taxes is not voluntary, but it is assumed that all taxpayers will report all of their income and expenses as accurately as possible
This is enforced through various IRS systems like notices and audits (2/14)
This is enforced through various IRS systems like notices and audits (2/14)
Miss me with that noise that your tips from the community are not taxable and just gifts from friends. You're wrong.
Also, if you don't get a tax document that doesn't mean you are allowed to not report all your income. You do. (3/14)
Also, if you don't get a tax document that doesn't mean you are allowed to not report all your income. You do. (3/14)
Even if you make good faith mistakes, that is better than not filing your tax return.
Well, what if I need more time to put together an accurate return even past the extended deadline of October 15th?
File it. You can always amend it, but filing on time protects you (4/14)
Well, what if I need more time to put together an accurate return even past the extended deadline of October 15th?
File it. You can always amend it, but filing on time protects you (4/14)
TAX DOCUMENTS
W-2s from employer
Twitch 1099 - taxcentral . amazon . com
YouTube - Google > request youtube 1099
Paypal - Activity > statements > tax documents
Patreon - Left navigation pane > Income > taxes
OnlyFarmers - Physical copy mailed, can request via email (5/14)
W-2s from employer
Twitch 1099 - taxcentral . amazon . com
YouTube - Google > request youtube 1099
Paypal - Activity > statements > tax documents
Patreon - Left navigation pane > Income > taxes
OnlyFarmers - Physical copy mailed, can request via email (5/14)
Let's talk about Paypal & Patreon
Paypal and Patreon issues 1099-Ks & to get one you have to meet the threshold of $20,000 received AND more than 200 transactions
If you don't get a tax document, you are still required to report that income (6/14)
Paypal and Patreon issues 1099-Ks & to get one you have to meet the threshold of $20,000 received AND more than 200 transactions
If you don't get a tax document, you are still required to report that income (6/14)
Patreon will give you a report that shows your earnings for the year
Paypal you can download a report that you can filter to get the data you need
Paypal activity > statements > custom > all transactions, calendar year > download csv
(7/14)
Paypal you can download a report that you can filter to get the data you need
Paypal activity > statements > custom > all transactions, calendar year > download csv
(7/14)
Also, don't forget, if you deposit YouTube or Twitch earnings in PayPal, you have a whole other issue to address which you can read about here (8/14) https://medium.com/@epjonescpa/understanding-twitch-1099s-e16b427509b6
And guess what? Youtube has changed their classification of income to royalties (9/14) https://twitter.com/WarbNull/status/1329512610618753025?s=20
So, that's just figuring out your revenue. Next up expenses which are referred to as write offs.
A business expense is defined as something that is ordinary and necessary to what you are doing.
I explain it as common to your industry and helpful to what you are doing (10/14)
A business expense is defined as something that is ordinary and necessary to what you are doing.
I explain it as common to your industry and helpful to what you are doing (10/14)
You gift subs to your own channel that's an expense. You subscribe to other broadcasters, expense. You buy a prefab cosplay or make it yourself, expense.
You buy the $10k gaming PC to run RuneScape in 8k, sure, business expense. (11/14)
You buy the $10k gaming PC to run RuneScape in 8k, sure, business expense. (11/14)
There is nuance here, but effectively, everything that you spend money on related to your content or adjacent to it is a business expense and you should be trying to capture every single dollar because it will lower your tax bill. (12/14)
Do you need an LLC? From a tax perspective, no.
Should you have one for legal reasons? I can't answer that because I'm not a lawyer.
Can you save on taxes by having one? Yes but, you shouldn't try to set up tax structure on your own (13/14)
Should you have one for legal reasons? I can't answer that because I'm not a lawyer.
Can you save on taxes by having one? Yes but, you shouldn't try to set up tax structure on your own (13/14)
Want to save on taxes?
File your taxes timely
Make sure to report all your income
Maximize your expenses
Look at saving in a tax advantaged way (401k, HSA, SEP, etc)
Explore your legal need for an LLC and if you can benefit from tax structure
(14/14)
File your taxes timely
Make sure to report all your income
Maximize your expenses
Look at saving in a tax advantaged way (401k, HSA, SEP, etc)
Explore your legal need for an LLC and if you can benefit from tax structure
(14/14)
I forgot one other thing. If you are actively creating content, then any royalty income you earn is subject to self-employment
Meaning if you don't have an LLC, you report it under Schedule C not Schedule E
Meaning if you don't have an LLC, you report it under Schedule C not Schedule E
